IDEAS home Printed from https://ideas.repec.org/p/can/series/2001-01.html
   My bibliography  Save this paper

Quantitative implications of the fiscal theory of the price level

Author

Listed:
  • Santiago Mira Navarro

    (Universidad de Las Palmas de Gran Canaria)

Abstract

The traditional interpretation of effect of money on prices provided by the Quantity Theory of Money (QTM) has been challenged reciently by the Fiscal Theory of the Price Level (FTP). This paper analyzes the QTM and the FTP from different angle and provides quantitative results of the alternative interpretations. The analysis is based on a general equilibrium rational expectations model driven by monetary, fiscal, and productivity shocks. If the money supply relationship is the determinant of the price level we obtein the standard effects of shocks. However, if the goverment budget constraint is the relation that determines inflation, the impulse response function to the shocks are different. These results are a reference to evaluate the relevance of alternative monetary models: the quantitative implications of a fiscal theory and a a quantitative theory are not the same.

Suggested Citation

  • Santiago Mira Navarro, 2001. "Quantitative implications of the fiscal theory of the price level," Documentos de trabajo conjunto ULL-ULPGC 2001-01, Facultad de Ciencias Económicas de la ULPGC.
    • Handle: RePEc:can:series:2001-01
    as

    Download full text from publisher

    File URL: http://www.bibliotecas.ulpgc.es/fcee/hemeroteca/documentos%20de%20trabajo/DocumentosDTrabajo/doc1/mainport.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Monetary and Fiscal Policies; Fiscal Theory of Price Level;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:can:series:2001-01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Patricia Santana (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.